Stock markets are euphoric after Donald Trump's victory as pundits bet on U.S. economic growth based on the president-elect's stimulus plans, but be aware of trade deficits and funding U.S. consumption, said Yale economist and noted author on China, Stephen Roach
"Given the overall savings of the U.S., that spells bigger trade deficits and for a president who is clearly raising some protectionist flags at a time when our trade deficits are going to widen, that's a big disconnect," Roach, a former chairman of Morgan Stanley Asia and chief economist, told CNBC's "Squawk Box".
"The idea of larger trade deficits colliding with protectionist shifts in policy is a very worrisome development for the U.S. and for the broader global economy," added Roach.
Roach's comments come against a background of Trump having campaigned on remedying a wide trade gap in favor of Beijing that he said was spurred by moves to artificially weaken the yuan and restrict entry into home markets. He has also angered China by taking a congratulatory phone call from Taiwan President Tsai Ing-wen and calling into question the foundations of the "One China" policy. China is the world's top holder of U.S Treasurys, and any major change in that stance would have broad macroeconomic impact.